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The Constitutionality of the Affordable Care Act, Gay Edition

BY ARI EZRA WALDMAN

During the Supreme Court's extended hearings on the constitutionality of the Affordable Care Act, the media has spoken a lot about the meaning of the words "tax" and "penalty," the applicability of an obscure Nineteenth Century law called the Anti-Injunction Act, the federal mandate, "Romneycare," the supposed exceptionalism of the health care market, and, of course, broccoli. One angle that won't get much play is the unique role that HIV-related health care could play in determining that one of President Obama's signature legislative achievements is constitutional.

SchoettesScott Schoettes, HIV Project Director at Lambda Legal, wrote a highly regarded amicus brief in the health care case in which he argued that the individual mandate is constitutional because it is a "necessary and proper" move to ensure nondiscriminatory access to health care. Mr. Schoettes took us through the argument in a recent post at The Huffington Post

Congress has the power to address the exclusion of a particular group -- specifically people living with HIV, but more broadly anyone with a pre-existing condition -- from a market that operates in interstate commerce. But the ban on pre-existing condition exclusions will not work without the accompanying individual mandate, which requires every American to become a part of the health care insurance pool regardless of their current health status. For that reason, the individual mandate is a necessary and proper means by which Congress can effectuate its clearly constitutional power to regulate an interstate market under the Commerce Clause.

Mr. Schoettes's view is that the individual mandate is a lawful use of Congress's Constitutional powers to prevent invidious discrimination in an interstate market. On its face, this argument has little to do with health care per se, which would seem to let us bypass the economic and slippery slope arguments that seem to have consumed the Court's questions so far. It is similar to the argument Kathleen Sullivan made on behalf of the California Endowment, an organization aimed at expanding health coverage in California. Ms. Sullivan wrote an amicus brief stating that Congress's power to pass the individual mandate is a necessary and proper means of preventing or repairing market failure in interstate commerce. Discrimination, or a systematic denial of health coverage, is one form of market failure.

Today, I would like to evaluate Mr. Schoettes's argument and argue that its doctrinal precision offers a possible response to conservative economic arguments against the constitutionality of the individual mandate.

CONTINUED, AFTER THE JUMP...

The individual mandate is the ACA's requirement that almost everyone buy health insurance or pay a penalty. This serves two functions: First, by definition, it achieves near universal coverage, which was a social goal articulated by President Obama and Congress. Second, it allows the ACA's most popular provision -- the ban on denying coverage to consumers with pre-existing conditions -- to function. Without everyone -- young and old, healthy and unhealthy -- in the pool, it would be prohibitively expensive to ensure the most vulnerable among us who need health care the most.

ScTo many progressives, that sounds like good policy; but, that's a question for Congress. This week, the Supreme Court hears argument on the constitutionality of that policy, whether you think it's good or bad. And, the law's constitutionality depends on finding an enumerated power in the Constitution that allows Congress to require all citizens to buy health insurance. For states, like, say, Massachusetts, there is no such problem: States have what we call the "police power," or a general grant of power to pass laws, regulate behavior, or enforce order for the betterment of their citizens. The United States Congress has specific enumerated powers in Article I of the Federal Constitution, so any Congressional action has to be based on one of those powers. This is why states can mandate that we all buy car insurance without having to go through this debate.

The conventional progressive wisdom is that Congress's power to require nearly everyone to buy health insurance comes from the Commerce Clause, which allows Congress to regulate interstate commerce. The argument uses the language of economics (we are, after all, talking about markets), but it is pretty simple, even for the econo-phobic: The refusal to buy health insurance not only significantly affects the insurance market for everyone else (by putting upward pressure on prices), but not buying insurance is, perhaps counterintuitively, a form of economic activity. Those freely electing to be uninsured are making decisions about the cost of consuming health care services relative to the cost of consuming health care insurance, gobbling up the former when they need to, paying for it however they can, while rejecting the latter. Therefore, the individual mandate is a "necessary and proper" exercise of Congress's power under the Commerce Clause.

The Supreme Court has previously held that nonactivity is economic activity for the purposes of the Commerce Clause. In Wickard v. Filburn (1942), a wheat farmer wanted to grow more wheat than the federal government allowed after it passed a limit on wheat production per acre in order to drive up prices during the Depression. Even though the farmer said he was growing it for his own consumption, i.e., not for sale on the market, the Court held that Congress could shut him down: Growing extra wheat for yourself took you out of the very market Congress was trying to prop up. One wheat farmer might have no impact on demand, but if all wheat farmers grew their own, no one would buy any wheat on the market, slashing demand and destroying the industry. Since the "total incidence" of consumers not participating in the wheat market "poses a threat to a national market, [Congress] may regulate the entire class." (Gonzales v. Raich (2005)).

LambdalogoLambda Legal's argument for the constitutionality of the ACA is a little different. Mr. Schoettes reminds us that people living with HIV have been "systematically excluded from the health-care insurance and health-care markets." More than 67 percent of the population has private health insurance, but only 17 percent of HIV-positive individuals do. The remainder fall under Medicare, Medicaid, and the VA, nearly 30 percent are under-insured or go without insurance. This means that, on average, people with HIV go longer without care, suffer complications, and die at too high rates, with all these devastating effects more pronounced in traditionally marginalized groups, including the LGBT, poor, and black communities.

In the current health care industry context, the only way under-insured HIV-positive individuals can get insurance is through a regime that prohibits insurance companies from denying coverage to people with pre-existing conditions, which, as discussed above, only works with an individual mandate. Therefore, the mandate is a necessary and proper exercise of Congress's Commerce Clause power not because consuming health care and buying insurance affects the price of both, but rather because Congress can use its power to fix an interstate market's discriminatory effect.

BroccoliThis theory merits strong consideration, especially because it silences some the conservative economists' arguments against the progressive conventional wisdom. 

To the progressive argument that the health care market is unique, justifying regulation because of its eventual necessity in everyone's life and the requirement that all hospitals provide service regardless of the patient's ability to pay, conservatives say that the market for health care is no more unique than the market for food, which we are more likely to consume. Indeed, it's hard to see a limiting factor in a market's supposed economic "uniqueness;" all markets are somehow unique economic animals. But, while conservative economists poo poo the second uniqueness factor -- the fact that hospitals have to provide health care services to all -- as "circular," previous lawful Congressional regulation does make the market for health care different. Just because Congress created that difference doesn't de-legitimize the constitutionality of subsequent regulations necessary because of the original Congressional action, especially when the original Congressional action was constitutional.

And, as Mr. Schoettes points out, the health care market might also be unique because, without the ACA's individual mandate, the market excludes a particular subgroup of the population that needs health care and would be discriminated against because of the pre-existing condition that defines the group. When other interstate markets function in a discriminatory manner, the federal government has the power to step in pursuant to its powers under the Commerce Clause, the Equal Protection Clause, and the Due Process Clause.

***

Ari Ezra Waldman is a 2002 graduate of Harvard College and a 2005 graduate of Harvard Law School. After practicing in New York for five years and clerking at a federal appellate court in Washington, D.C., Ari is now on the faculty at California Western School of Law in San Diego, California. His research focuses on gay rights and the First Amendment. Ari will be writing weekly posts on law and various LGBT issues.

Follow Ari on Twitter at @ariezrawaldman.

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Comments

  1. @ARI EZA WALDMAN

    I applaud the work you have done on LGBT issues!
    Look forward to your up dates. I do hope that no matter which way the court comes down that folks realize the importance of the pre existing part of this bill effects many people even those that have insurance. Things like life time caps etc.are a real issues.
    Because I no how first hand how medical cost can add up.I do think just like car insurance people should have to have some coverage.I always thought the constitution was also about ones responsibility to all citizens Folks that think not having insurance is their right effects all citizens. The tax payers more often than not end up footing the bill.

    Posted by: SOLUS | Mar 28, 2012 5:00:04 PM


  2. It's still murky to me, and I have a degree in economics.

    I think the really interesting question is severability. If SCOTUS throws out the individual mandate and maintains the nondiscrimination constraints on insurance companies, Congress may well have forced themselves to create the public option we should have had in the first place.

    Posted by: Rich | Mar 29, 2012 3:35:40 AM


  3. Thanks for sharing the blurb on the amicus brief - a novel and worthy approach.
    I have looked at some of the cases cited in support of the Mandate and they are very hard to reconcile. One can only conclude that the Justices are giving way to their own prejudices as the choose to limit Congress's power or not. Do you know of any coherent analysis of the cases that can make sense of them?

    Posted by: Markt | Mar 30, 2012 12:20:41 AM


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